Wichita eagle. [volume] (Wichita, Kan.) 1886-1890, 1887-12-02
EASTERN MONEY IN THE WEST.
Growth and Soundness Of the Whole
Business.


He is too lengthy for these columns, but
he shows not only the safety of the course
and the beneficial results to both east anC
west but predicts a great increase Of the
business in the near future. We can
only make liberal extracts from his four
column article.
Within the last two or three wears
many new companies have sprung up
here in Boston for the investment of east
tern money in the west. They bear vari-
Gus kinds Of attractive names. such as
security companies, western farm mort
gage companies, loan and trust com
! panieS, and SO on. Their appearance is
! proof of another stimulus to investment
/ such as was seen here a few years ago
I when Maine mining stock were in such
! demand, with this difference. however.
| that there is doubtless much merit in
many of these investment companies.
| In broad point Of view they are doing
| much for the development of the west.
! for they are the means Of sending a
/ large amount of money to those parts of
our country which can make profitable
use of it, and can afford to pay good
rates of interest. These companies, in
! Guiding both those which have been es-
/ tahlishe9 for long time and those Of
more recent origin, have sent many mill
t ions Of dollars to the western states. and
! are now sending large sums out there
every week. In consequence of
this westward flow of mon
ey, rates to the western
farmers have been reduced so that they
can improve their farms much faster
than could be done under the feeble
stimulus of the money Of local savings
only. Their comfort and prosperity have
been materially increased, and the set
Elements of the west has been greatly
advanced. So that this western flow of
money has an important national bear
! ing as related to the growth of the west
ern states.
Besides this, it has opened wide field
of investment for the money savers Of
the east, and has added materially to
their prosperity by giving them larger
rates of interest than they could possibly
get at home. Thus the prosperity of the
east has been bound up in the rapid adj
vance Of the west, and the gain of one
has been the gain Of both.
But the lenders Of the east and the
borrowers Of the west do not concern
themselves in the national aspect Of the
case.
What they are after on the one hand
is a large rate of interest. and on the
other, plenty Of funds at moderate rates
for the developement of their natural re-
sources. One consequence of the ssgreht
flow of money to the western farms and
cities has been to lower the rate Of inter
est materially. Whereas 10 to u per
cent was common rate, and often went
much higher than that, now all the COM
papies will guarantee to eastern lenders
is and 6 per cent. Thus the western
borrower has obtained his money at
much lower rate than he would other
wise have been able to do, but the east
ern lender has got a better rate than he
could if his field had been confined to
eastern investments.
One of the most experienced men in
this line in Boston has been in the work
for thirty-five years, and. of course.
many more years ago than that persons
were sending money west to invest.
This was done at first through private
parties, usually family friends. Emf
grants from the east who had gone on
western farms wanted some money to
carry them on with and sent TO their
old folks at home to send them funds
Good security could be given and rates
Of interest Were attractive ard so money
has been flowing westward for many
long years: But it rs only within three
or four Years tfatt the BUSINESS has takeff
such a sudden St5rt: 1t seem to have
Coma about in some such WY az tl1is:
Persons in the west who were receiving
this money, which was coming from their
EASTERN friends. found that Their com
missions were amounting to something
appreciate. and that there was likely to
be a constant demand for money in the
west. So they organized into companies
for the placing of such sums as they
could raise in the east. In the east. on /
The other hand. it was found that there /
was a constant outlet for all the money
they could raise, and that some systemat- |
ic method Of gathering funds would be |
profitable. SO at the eastern end of the
line companies Were formed for the pur- |
pose Of sending money to the west Thus |
the business was set going to its present !
form of operation through regular organ |
cations. These organizations have been /
very successful, and the results have |
been surprisingly good al around. Both |
borrowers and lenders have made a good F.
thing, and the middlemen have also /
exceedingly. Hence c zones up /
the crop of new companies. involving thei
question Of the SoundneSs of the whole |
business, which viii be noticed farther
along.
Now comes up the manner in which
well in every district where there is more
or less liability to the reverses of nature
drought, or flood. or caterpillars. or
cyclones, or one of the thousand and one |
things which menace the farmers crop.
But these lni5fortllneS are not likely to
come all i'll one place. so the risks are
scattered. \ locality is taken here and
another at distance. so that il if a flood
carries away the. crop in one place. it
may not sweep off ali the reliance for the
payment of the interest due. II is the
preference of the conservative companies
to loan IN small amounts, for the most
part Under $1,000.
In regard to the safety of these west
arn loans, alr. Edward Atkinson has.
within i short time obtained figures
from several Of the leading
Boston companies. covering vari-
Dus terms from four To thiriv-ei-ht
years, and they show 4 total OF 200.uoO
mortgages, with a total of $50. o00. 900
o3ned. or an average of 5000 70 mort
gage. OF these there remains outstand- ,
ng 81. 600 mortgages for SIS 100000. In
Ill this large number of MORTGAGES there /
awe not been over 100 foreclosures and
here has been profit on the foreclosure |
account This shows that these loans !
nave been in the past n safe form of in ,
1estment. But the period covered does
12t contain time enough for seeing the
fleet OF the recent rapid growth OF the &;
KNstN~n nlnrr No. h:,Sln.ss 1-l,ot Iii :